Recession and the Canadian Hotel Industry

By Vi Thi Dang

How bad is RevPAR?

The economic downturn has negatively impacted the hotel industry and its profitability. Occupancy levels began to drop in the last quarter of 2008 and reached a new low in the first quarter of 2009. Hotels have been discounting room rates over the past six months in the hopes of attracting new business. Not only has this strategy had little effect in improving occupancy levels, it has also caused RevPAR to plunge. In Q1 2009, RevPAR in the United States plummeted by unprecedented double digits relative to the same period in 2008. Although the hit to Canadian economy has been less severe, the Canadian hotel industry has also experienced a substantial drop in RevPAR. So, how does the Canadian performance compare to the US performance?

The economic downturn has negatively impacted the hotel industry and its profitability. Occupancy levels began to drop in the last quarter of 2008 and reached a new low in the first quarter of 2009. Hotels have been discounting room rates over the past six months in the hopes of attracting new business. Not only has this strategy had little effect in improving occupancy levels, it has also caused RevPAR to plunge. In Q1 2009, RevPAR in the United States plummeted by unprecedented double digits relative to the same period in 2008. Although the hit to Canadian economy has been less severe, the Canadian hotel industry has also experienced a substantial drop in RevPAR. So, how does the Canadian performance compare to the US performance?

The economic downturn has negatively impacted the hotel industry and its profitability. Occupancy levels began to drop in the last quarter of 2008 and reached a new low in the first quarter of 2009. Hotels have been discounting room rates over the past six months in the hopes of attracting new business. Not only has this strategy had little effect in improving occupancy levels, it has also caused RevPAR to plunge. In Q1 2009, RevPAR in the United States plummeted by unprecedented double digits relative to the same period in 2008. Although the hit to Canadian economy has been less severe, the Canadian hotel industry has also experienced a substantial drop in RevPAR. So, how does the Canadian performance compare to the US performance?